Aviation Business


Al Fahim Group’s in­vest­ment in Black­lane and the premium chauf­feur ser­vices seg­ment

- By Megha Merani Business · Cars · Startups · Small Business · Berlin · Middle East · Dubai · United Arab Emirates · India · Italy · Sweden · Paris · Asia · Audi · BMW · Uber · Lexus · Blacklane · Careem

Black­lane, a Ber­lin-based global pro­fes­sional chauf­feur ser­vices start-up that Al Fahim Group has in­vested in, an­nounced the open­ing of its Mid­dle East of­fice in Dubai this week. Black­lane also an­nounced a deal with Emi­rates to ex­clu­sively take over its com­pli­men­tary chauf­feur-drive ser­vice for its First and Busi­ness Class pas­sen­gers in In­dia, Italy and Swe­den.

The start-up of­fers lim­ou­sines and high-end cars for air­port and medi­um­length jour­neys. In Jan­uary, the com­pany raised a Se­ries D round — from three in­vestors, in­clud­ing Al Fahim — to fund prod­uct in­no­va­tion and ex­pan­sion to new cities. Al­though Black­lane de­clined to dis­close the amount of the in­vest­ment, Crunch­base lists it as $40m. Al Fahim owns about a 10% stake.

“We’ve al­ways wanted to get in­volved in the start-up scene, es­pe­cially in the car busi­ness,” Ab­dul Karim Al Fahim, board di­rec­tor of Al Fahim Group said at the an­nounce­ment.

Black­lane dif­fer­en­ti­ated it­self through lux­ury, qual­ity and ser­vice, he added, which are in line with the con­glom­er­ate’s val­ues. Of course Black­lane’s use of Mercedes cars, for which Al Fahim are dis­trib­u­tors, helped tick all the boxes.

Black­lane serves more than 300 cities and 60 coun­tries. Black­lane Pass, its air­port concierge ser­vice, reaches more than 500 air­ports world­wide. In the Mid­dle East and Africa, the mo­bile app serves 21 cities in 10 coun­tries, with dozens ex­pected to be added in the com­ing months.

Un­like surge pric­ing mod­els of other providers, Black­lane of­fers vis­i­ble fixed rates. It only oc­ca­sion­ally raises prices for so­cial events like Paris Fash­ion Week.

Hu­man cap­i­tal

Jens Wohltorf, CEO and co-founder of Black­lane, tells Ara­bian Busi­ness that the big­gest hur­dle to growth is find­ing

the right peo­ple to drive the cars. “We ex­pe­ri­enced twice as many first class book­ings from this re­gion than we do with any other re­gion, so there’s a need for premium mo­bil­ity, but un­for­tu­nately sup­ply is very lim­ited and dif­fi­cult to es­tab­lish, not only in terms of ve­hi­cle qual­ity, the right car, the right age of the car, but also the chauf­feurs.”

He adds: “I find that of­ten they’re a bit rude in terms of driv­ing skills,” talk­ing about his ex­pe­ri­ences test­ing other ser­vices in the UAE. “They don’t care about ser­vice. I also had rides where I was sup­posed to get a water bot­tle but the bot­tle was used.”

Black­lane has a very se­lec­tive re­cruit­ment process and mul­ti­ple train­ing ses­sions. In a re­cent re­cruit­ment drive, Moustafa Khafagy, Black­lane’s af­fil­i­ate man­ager for the Mid­dle East and Africa, told Ara­bian Busi­ness that only about eight out of 80 ap­pli­cants made the cut. The main is­sues with driv­ers in the UAE, he says, in­clude poor English, hy­giene prob­lems and un­safe driv­ing. Black­lane’s chauf­feurs are re­quired to take de­fence driv­ing train­ing. The rides also come with water, a news­pa­per, snacks and mints.

Wohltorf says that good ser­vice is crit­i­cal, as there’s a “will­ing­ness to pay” for qual­ity in the re­gion. “We’re not that much more ex­pen­sive than lo­cal ride-hail­ing or taxi ser­vices,” he adds. “For ex­am­ple, from Dubai Ma­rina to the air­port must be about AED150 or so in a taxi or other ride hail­ers. For us it’s about AED180... so 20% or so more but the qual­ity is 100% more.”

Fu­ture growth

The com­pany says its global foot­print is grow­ing more than 100% year-on-year. “This re­gion is prob­a­bly twice as fast,” Wohltorf says. “This, as well as some mar­kets in Asia, is our fastest re­gion in terms of growth.” Be­fore its deal with Al Fahim, Black­lane’s UAE fleet, op­er­at­ing through lo­cal chauf­feur ser­vice providers since 2013, counted “a cou­ple of hun­dred cars”, which in­cluded Mercedes, Audi and BMW ve­hi­cles.

Asked if ride-hail­ing com­pa­nies like Uber and Ca­reem, both ma­jor play­ers in the re­gion, ought to be con­cerned about Black­lane cut­ting into a piece of their pie, Wohltorf re­sponds: “I think we’re quite com­ple­men­tary. We’re not serv­ing small in­ner city dis­tances. On short dis­tances no­body cares about qual­ity.”

“Now we’re get­ting into the ball­park of over 1,000 cars and that’s go­ing to be grow­ing two if not three times year over year,” Wohltorf says, with plans to in­clude more Mercedes of course by get­ting their providers bet­ter rates on the ve­hi­cles.

“We even had some Lexus cars but then fig­ured it’s not the right fit to the tar­get group,” he adds. “The most ex­pen­sive Lexus isn’t as ex­pen­sive as the most ex­pen­sive Mercedes. So there’s still a dif­fer­ence in terms of qual­ity but es­pe­cially I think its rep­u­ta­tion. They (our clients) feel bet­ter in a Ger­man premium ve­hi­cle than in a Ja­panese one.”

In ad­di­tion to cor­po­rates, busi­ness trav­ellers and pri­vate in­di­vid­u­als, Black­lane is eye­ing more deals like the one it struck with Emi­rates. “Air­lines is a very in­ter­est­ing spot for us,” Wohltorf says. “This is just the start.”

Chas­ing uni­corns

Be­stow­ing your­self with uni­corn sta­tus de­spite be­ing a rel­a­tively un­ac­com­plished start-up is the mind­set that’s block­ing en­trepreneur­s in the UAE from be­com­ing the next big global suc­cess story, says Khaled Ab­dul Karim Al Fahim, board di­rec­tor of Al Fahim Group, one of the old­est and largest fam­ily busi­ness con­glom­er­ates in the re­gion.

“My opin­ion is that they’re think­ing uni­corn and they’re still a startup,” he tells Ara­bian Busi­ness, when asked why global tech giants aren’t com­ing out of the UAE. “They’ve got the men­tal state wrong. They’re not think­ing and op­er­at­ing like a startup. You need to live, eat, drink and sleep your prod­uct.”

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 ??  ?? Al­though Black­lane de­clined to dis­close the amount of the in­vest­ment, Crunch­base lists it as $40m.
Al­though Black­lane de­clined to dis­close the amount of the in­vest­ment, Crunch­base lists it as $40m.

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